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Oryx Midstream to build new Delaware Basin pipeline

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World Pipelines,

Oryx Midstream Services II, LLC (Oryx II) announced that it will build a new regional crude oil transportation pipeline serving the Delaware Basin with initial capacity of up to 400 000 bpd.

Oryx II recently closed on a long-term regional oil transportation agreement with WPX Energy and other producers bringing total acres committed to Oryx II to approximately 300 000 dedicated acres. When combined with Oryx Midstream Services, LLC (Oryx I), the total Oryx Delaware basin dedication footprint and system capacity will be in excess of 850 000 acres and 600 000 bpd, respectively.

Construction will begin immediately on the new 220 mile regional transport line that will provide receipt points from the Carlsbad, Stateline, Pecos and Pyote areas, and deliver crude to Crane and Midland, Texas. The system, comprised of 16, 20 and 24 in. lines, will have an initial capacity of up to 400 000 bpd with the ability to expand based on shipper needs. It will serve production from every active county in the Delaware Basin including Lea and Eddy counties in New Mexico and Loving, Reeves, Ward, Pecos, Winkler and Culberson counties in Texas. The new crude oil pipeline will be constructed in phases and is expected to be in full service by the end of 2018.

“As ongoing improvements are made in drilling technologies and rig counts in the Delaware Basin increase, production growth from Oryx’s customer base, including WPX, continues to be strong. With this strong production growth comes transportation bottlenecks, an issue that this new pipeline will address, providing much needed takeaway capacity in the area,” said Oryx Chief Executive Officer, Brett Wiggs. “The Oryx team remains focused on improving and expanding our asset base, to not only meet producers’ current needs but also anticipate the future needs of our customers.”

Karl Pfluger, Oryx President, said: “The combined footprint of our crude gathering and transportation system is unparalleled. Based on our current and future customers’ needs, we are considering strategic opportunities to leverage the unique scale of our combined footprint to better serve producers in the Delaware basin. One of these strategic opportunities includes a potential long-haul transport system to the Gulf Coast."

Oryx I was launched in 2014 by an initial equity commitment totalling up to US300 million from Quantum Energy Partners, Post Oak Energy Capital, Wells Fargo Energy Capital, Oryx management and other private investors. In March 2017, Oryx II closed on an equity commitment of US$340 million from the same sponsor group, bringing the total commitment to Oryx to US$640 million.

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US pipeline news Crude oil pipeline news